It’s too soon, last thing you want is crowing now and then running into economic worsening right at election time
You don’t want to talk about how things are getting better when the absolute conditions aren’t meeting people’s minimum expectations. There will come a time, hopefully in the next 2-3 months, when talking about how we’ve turned a corner and are on the way to a brighter/better future full hopium campaign is the right move to just absolutely smoke the GOP, but we aren’t there yet.
Also the chances there’s a major banking crisis related to commercial real estate in the next 90 days is XX% and nobody knows what the actual number is because it’s thousands of commercial mortgages spread across hundreds of markets and when specifically that piece of paper matures. Not the end of the world for main street if it happens, fortunately office buildings are something that generally are entirely owned by the extreme outer limit of the top 1%… but the banks collapsing will trigger those of us with really clear memories of '08-'09.
The biggest banks are extremely well capitalized and don’t have much CRE exposure as a % of assets. The regional banks will take losses in CRE, but even they are far better regulated than before the last downturn and the systemic risk is very limited.
Hilariously I actually trust your word on this. Really? I’ve been hearing about major downtown office buildings selling for 80% discounts. How can that even work? Who actually owns the paper that is taking these losses? Someone has to be collapsing because of this.
Again, this is a battle for hearts and minds, which is totally susceptible to propaganda. Ceding this ground creates a huge part of the narrative to republicans, which is dumb.
Also, @surf, scared money don’t make money. If the economic sputters in the fall it’s not like there won’t be repercussions if you’re silent now. The only difference is that you get no credit for the times when things were good and you’ve ceded the entire message space to republicans
There’s also the fact that everyone under 40 who doesn’t own a home is pretty much fucked regardless of whether wage growth outpaces inflation by 1% or not.
We have a situation where averages and medians don’t tell the story well at all. Rich people want to point to the averages and medians and say, “See? Everything is great! Now shut the fuck up, vote blue, and let’s keep rolling with more of the same!”
In fact, even by the medians and averages…
Rent in cities, CPI, Dec 2019 to present: +21.92%
Average Hourly Earnings, Dec 2019 to present: +21.78%
Pre-covid to present, things have not gotten better for the working class/middle class. Meanwhile, median sales prices of homes are up 27.70% since then.
And rent inflation continues to run north of 6%, so this 4.5% wage growth that’s “far ahead of 3.4% inflation” really doesn’t mean jack shit to anyone who doesn’t own a home.
The equity gets wiped out completely and the lenders take losses.
At a well run bank CRE loans are like 10-15% of total assets, and office loans should be no more than 20% of that, so at most 3% of total assets. Most banks will lose money on CRE but they won’t fail because of it.
Bad news here is that real estate prices are a supply problem driven at the local level, and the worst offenders are democrats
Are they measuring their exposure by total dollar value of the loans? Or by the gap between the dollar value and what their modeling shows as a possible floor on pricing?
Also, how confident are you that there isn’t a series of whatever they’re calling credit default swaps nowadays floating around in the ether as the next shoe to fall that’s massive enough to cause real problems?
I don’t really care who the worst offenders are, neither party is doing jack shit to help people who need housing, and the point is that running on “THIS ECONOMY IS AWESOME!” is not a great idea when a large chunk of your base (young people) are getting shitted on by runaway housing costs and you’re doing absolutely nothing to help them.
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Biden has done a ton to help those people though in student loan reforms alone.
So say that and not “the economy is awesome”.
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Plenty of us don’t have student loans in the first place, and my understanding is that if you’re earning over a certain amount then you don’t get any relief on that front anyway - and that amount seems to be way lower than “can afford to buy a house” level income. My wife’s student loan payments will start at the end of this year, and when I ran the numbers on a nurse’s salary, she wouldn’t qualify for any help. I can assure you we are nowhere near buying a home.
Plus, isn’t most of that stuff tied up in the courts?
You shouldn’t message because you’re afraid of gen z voters suddenly not voting because you point out to the suburbs (where this election will likely be decided) that things are going well. It is easy to do both
Yeah, “I’m trying but the Republicans are blocking it,” is a better message than, “Shut up, loser, everything is awesome!”
But at the end of the day, he’s not really trying - in so far as he won’t call for Dems to nuke the filibuster or pack the court. So any real change (on this, on abortion, on anything that needs to get through the Senate and be upheld by SCOTUS) is going to be more than four years away.
It just doesn’t seem like voters vote on basis of gratitude. They vote on future fears and hopes, so talking about things being awesome in the past or now just doesn’t seem relevant
Exposure is by gross dollar amount. Banks know office is a disaster and most have reserved anywhere from 5-10% of their office exposure to cover expected losses already.
Again, banks will absolutely take losses and some regional banks that have too much CRE exposure will have to navigate choppy waters, but the chance of an overall economic slowdown as a result of bank CRE losses is close to zero.
JPM, Wells, BoA, Citi have very little exposure and they dwarf the regional banks in size.
Biden has forgiven 132 billion to roughly 3.6m people so far.
Other changes like how interest accrues, debt defenses and more also have no income limits. The changes to the PSLF program is saving me hundreds of thousands of dollars. The SAVE program is also great.
Your fiancée should file taxes this year and then claim 0 on her income when setting up her SAVE plan. She gets a year of free payment and no interest while she does that. With PSLF working again (Trump had made it impossible), if she works at a hospital for 10 years it will be gone. These are huge positive changes
Wait, what? She graduates in May, and she has income right now from p/t work. Her student loans don’t start until late in the year. Is there some way to game this?
A nurse around here makes like $98K I think, according to her recently graduated friends, which means that according to the SAVE plan she would have to pay 5% of her discretionary income, defined as everything over 225% of the poverty line, which is $32,800. So she would have to pay 5% of $65,200 per year, which is $3,260 per year, so over 10 years she’d pay $32,600. She has < $20K in student loans at approximately 5% interest, so at worst like $1K a year would be going to interest, which as far as I can tell means that this saves us nothing.
We would need to be making a lot less or owe a lot more.
In 2021 the total CRE in the US was more than $20 trillion. The big four you mentioned have about $1T in market cap combined. I know it’s a lot more complicated than that - markdowns may have already happened and been reflected in stock prices, they could have $40 trillion in assets and $39 trillion in liabilities, etc. But it sure seems like even a 30% loss in CRE could be catastrophic.
If it’s not the banks who are going to hold the bag, who is it? Like let’s say $5 trillion goes up in smoke. Is that a reasonable number to pull out of my ass? 25% loss in the overall CRE valuations? It seems like a very reasonable estimate. That’s got to wipe a bunch of people out - maybe regional banks (not great but not catastrophic), maybe a bunch of REITs? But then where did the REITs get their money? Some could just be corporations who own their office space and their book value takes a big hit, which just impacts stock prices.
One of my thoughts here is that if a REIT operated with leverage, their losses are capped to their shareholders because it can’t go below $0, but someone has to hold the rest of the bag.